Transfer pricing is a tax topic that taxpayers, who carry out intragroup transactions, which exceed the thresholds set by the MPFO no. 442/2016 should consider prior to closing their books for 2022 and submitting their tax returns.
The essence of the transfer pricing exercise is the benchmarking analysis. Although the annual preparation of a full Transfer Pricing file is voluntary for non-big taxpayers unless required by the tax authorities, it is mandatory however, that the transactions between affiliated entities which exceed the thresholds should be concluded at “arm’s length” in compliance with the Romanian Tax Code. We advise taxpayers with intragroup transactions to perform a documented risk-based benchmarking analysis including the basis on the adopted methodology and corresponding business risks assumed by each part of an intra-group transaction, at least once a year before the submission of the annual tax on profit returns.
This exercise gives three main advantages, namely:
TGS Romania Tax, has the expertise and has developed a cost efficient but effective methodology and approach to support taxpayers to adopt the most appropriate Transfer Pricing methodology as well as document their compliance with the “arm’s length” requirements of article 11 (4) of the Romanian Tax Code and in line with the ANAF requirements.
For more details and advise on this important topic, please contact us:
Mihaela Rosu, Partner BPO & Tax TGS Romania firstname.lastname@example.org
Cristian Faica, Senior Manager Tax TGS Romania email@example.com